Cenvat Credit in respect of Repair and Maintenance

[puneet virmani]

A is engaged in trading of Airconditioners & also into the business of repair & maintenence contracts of Airconditioners undertaking AMC's. Further A is taking input tax cerdit @100% in respect of input service in relation to Repair & Maintenence /Security and on telephone/courier/photocopy/medical insurance of employees paid by employer taking cenvat credit retricted to 20% of service tax payable.Kindly explain whether claiming correct.

[Surender Gupta]

Yes, Maintenance or Repair / Security and other Services in terms of rule 6(5) are eligible for 100% cenvat credit. Rest of the services, Cenvat Credit is restricted to 20% of service tax payable.

AI Summary

Eligibility of 100% Cenvat Credit for Repair, Maintenance, and Security Services Confirmed Under Rule 6(5); Others Limited to 20% A participant in a discussion forum inquired about the eligibility of claiming Cenvat Credit for services related to repair and maintenance, security, and other services, including expenses like telephone, courier, photocopying, and medical insurance for employees. The query focused on whether claiming 100% input tax credit for repair and maintenance services and restricting others to 20% was correct. The response confirmed that under rule 6(5), 100% Cenvat Credit is permissible for maintenance, repair, and security services, while other services have a credit restriction of 20% of the service tax payable.